USAPonzi, "The Ultimate Government Fraud", has caused severe distortion in the global economic and financial system. Because of this U.S. Government fiscal and accounting fraud, the U.S. Government has been issuing counterfeit money to the U.S. citizens and businesses for the last 47 years that we have been using to buy things we cannot afford. One of the key items that we have been able to buy with this counterfeit money, to create some of this fiscal and financial distortion, is oil/gas.

The U.S. Government borrows money from the future U.S. taxpayers to give to the current U.S. citizens and businesses so that we can buy things we cannot afford with this borrowed and counterfeit money. And not just a little money, we are talking about $100.7 Trillion of counterfeit money as of December 30, 2015. This ever increasing stream of counterfeit money, that USAPonzi is producing, has caused asset price inflation. Stock prices have increased. Real estate prices have increased. The price of oil has increased. The price of gold has increased.

The oil producing countries have benefited greatly from this U.S. Government fiscal and accounting fraud. Saudi Arabia has been, and still is, the poster child for this fiscal and financial distortion in the price of oil. The low cost of oil production in Middle East, and particularly in Saudi Arabia, has made these oil producing countries appear to be very wealthy. This has made the Middle East royalty appear to be very wealthy and the political leadership in several of these countries have managed to maintain civility in their countries by sharing the counterfeit wealth from oil production with the Common Man.

When the price of oil escalated to over $100 a barrel, this created a bonanza for all oil producers. It even made oil production in the United States appear to be cost effective. Now that the price of oil is receding, this is causing a financial pinch for the high cost producers like the United States and now even for the low cost producers like Saudi Arabia.

The problem is that almost all of this oil is being purchased with money that has been borrowed from the future U.S. taxpayers either directly or indirectly. USAPonzi has created $100.7 Trillion of counterfeit money so that we can buy oil but we are also buying other stuff with this counterfeit money from other people, businesses, and countries so that they too can afford to buy high priced oil.

The U.S. Government is operating with a Ponzi scheme fiscal policy (USAPonzi) that is creating counterfeit money, counterfeit private wealth, and counterfeit prosperity for U.S. citizens and businesses with massive GAAP basis deficit spending. By deferring an ever increasing percentage of the cost of operating the U.S. Government to the future U.S. taxpayers, the U.S. Government is handing out counterfeit money to all current U.S. citizens and businesses by either overpaying them with social benefits, overpaying them with Government pay, or undertaxing them with GAAP basis deficit spending. This has created $100.7 Trillion of counterfeit money (reported on www.usdebtclock.org as US Unfunded Liabilities (GAAP)) that makes the people in the U.S. appear to be rich and prosperous and gives them tremendous purchasing power.

Please note that the amount of counterfeit money that USAPonzi has produced goes up with each of these commentaries. That is what Ponzi schemes do, they tend to get bigger and bigger until they implode.

Lee Harvey Oswald triggered this Ponzi scheme by assassinating JFK which produced USAPonzi and created what I call "The Oswald Financial Bubble" which is now fillied with $100.7 Trillion of counterfeit money and growing by $16.1 Billion a day. "The Oswald Financial Bubble" in turn has caused "The Internet Bubble", "The Housing Bubble", "The Automobile Bubble", "The Airplane Bubble", "The Smartphone Bubble", "The Oil Price Bubble", "The Gold Price Bubble", "The Stock Market Bubble", "The U.S. Upper Class Wealth Bubble", "The Wealth Gap", "The U.S. Government Spending Bubble", and "The Bloating of the U.S. Government".

But let's get back to the Saudi budget problem.

Saudi Arabia is a country of 30 million people and about 8 million of these are foreigners that reside there primarily to support and operate the oil production for the country. The GDP for Saudi Arabia is estimated to be about $750 Billion which represents about 1.2% of global economic activity. The annual budget report for the Saudi Government reports income of about $140 Billion and expenditures of about $238 Billion yielding a budget deficit of $98 Billion as reported this week. I also understand that about 80% of Saudi Government income is derived from their oil production.

This is why the budget crisis for Saudi is so severe as the price of oil declines. As they say, a pet alligator tends to grow to fit the size of the bathtub, and the Saudi Government spending has tended to increase as the price of oil increased and now that the oil price is coming down they are faced with a budget crisis.

This crisis will become much much more severe when they realize that most of their oil is being purchased with counterfeit money backed only by the U.S. Government promises that the future U.S. taxpayers will come up with what is now $100.7 Trillion and is increasing by $16.1 Billion every day. When USAPonzi implodes and this stash and stream of counterfeit money from USAPonzi evaporates, the price of oil will plummet, creating budget crises in all oil producing economies.

This U.S. Government fraud and corruption is causing severe economic and financial distortions all over the planet.

One other interesting statistic is that in 1960 the population of Saudi Arabia was 5 million and now, 55 years later, the population is 30 million. Money, even counterfeit money, can entice people to live and work in the desert.

The financial data presented in this commentary was sourced from www.usdebtclock.org as of December 30, 2015.